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US Ambassador lukewarm about direct cash transfers from oil revenues

United States (US) Ambassador to Guyana, Perry Holloway prefers Guyanese to talk more about improving social services and security instead of directly transferring oil cash to the poor.

“I think the more important conversation should be about not giving every citizen a cheque but giving every citizen a quality education, giving every citizen quality health care, a secure environment in which to live and work and I think if you do all of those things with the revenue that petroleum generates everyone will make plenty of money and be very prosperous,” he told reporters Monday night after the launch of the American Chamber of Commerce (AMCHAM) Guyana chapter.

Holloway said the national discussion should be more about what the Guyana government could do to provide Guyanese, especially youths, the skills and knowledge they need to be successful. “But you know each government is allowed to do whatever it wants and should certainly explore all options,” he said one week after Guyanese Distinguished Economics Professor, Clive Thomas pitched the idea of conditional cash transfers.

Thomas has said the maximum should be set at five percent of net revenues regardless of international oil prices. He has also suggested that probably an annual cash transfer of US$5,000 to each household could be used to improve health, education and remove children from work and place them back in school.

Remarking that several countries have been successful in lifting the “poorest of the poor” out of their conditions, the US Ambassador noted that some people believe that they should pay special attention to specific groups. “There is a lot of experts out there in that field that you could research it but I think most people say it’s not particularly a good idea on a broad-based manner but there might be some focussed way to do it,” he said.

United States-based International Financial Analyst, Sasenarine Singh has suggested that US$90 million be set aside annually for conditional transfers to poor Guyanese for them to improve their health and education status. Singh has said that only persons compliant with income tax and social security should be given the free cash from Guyana’s oil revenues.

Economics Professor, Tarron Khemraj is not opposed to the idea, though he has said that studies need to be conducted on the impact of money transfers from families and friends abroad on the willingness of people to work and search for a job. Khremraj has said cash transfers from oil revenues should be linked to the development of skills for long-term labour supply.

Opposition Leader, Bharrat Jagdeo has labelled Professor Thomas’ idea of conditional cash transfers an election ploy, but at the same time he supports the idea of giving poor Guyanese funds from the oil earnings. I support conditional transfers. We have done that before. We need to help poor people,” said Jagdeo, a Russian-trained economist and former Finance Minister. Prior to his People’s Progressive Party Civic’s defeat in May 2015, that party in government had provided GY$50 million to women for entrepreneurial development.

Jagdeo also wants to see much of that money invested in monthly health-checks, small business development and education to create long-term jobs. “Something is wrong with the mathematics. I believe that this entire process by Thomas, (David) Hinds and the WPA (Working People’s Alliance) is to fool people in 2020 again. It is to say, ‘give us another chance,’” he said. Professor Thomas has floated an annual amount of US$5,000 per year.

President David Granger has already said he has not seen evidence of the success of direct cash transfers to the poor. Finance Minister, Winston Jordan has welcomed debate on the subject but has hinted that he prefers to invest in education, health, youth development and small businesses instead of merely handing out liquid cash. “I would rather hear more debate about using our resources to create opportunities for people so that they themselves could have lasting incomes as opposed to short-term incomes because monies that you are going to be giving out will soon end and you would have pitched your lifestyle sooner or later to the monies that you receive and when you can’t no longer give those monies, then what is going to happen,” the Finance Minister has said.